For months now, the White House and the head of the regulator overseeing Fannie Mae and Freddie Mac have clashed over principal reductions for struggling homeowners. The Obama administration says that reducing the amount borrowers owe is essential to the housing recovery. Edward DeMarco, acting director of the Federal Housing Finance Agency, maintains that principal reductions would cost too much for the taxpayer-owned companies.

Frustrated by DeMarco's stance, Democrats in Congress and some state attorneys general have called for his resignation. Rep. Elijah Cummings, D-Md., said recently of DeMarco that "he and he alone stands in the way of hundreds of thousands of people, if not millions, being able to [literally] get a new lease on life."

Democrats have argued that the administration can't get around DeMarco and the FHFA's opposition to principal reduction. Is that really the case?

It wouldn't be easy, but the White House does have options.

The most straightforward thing the White House could do is nominate a replacement for DeMarco, who became acting director of the agency in 2009 after his predecessor stepped down. The administration had picked a successor more than a year ago, but Republican objections led to the nominee's withdrawal. The White House hasn't named a potential replacement since. It also passed on the chance for a recess appointment over the winter.

Obama has never called for DeMarco's resignation, though the administration has consistently urged DeMarco to adopt principal reduction. The Secretary of Housing and Urban Development, Shaun Donovan, said in February, "Our goal is to get a good nominee and get someone in there who shares our view."

The White House can't simply fire DeMarco. Independent regulators are supposed to be immune from political pressure, and it is rare that the president would seek to remove them. In some cases, heads of independent agencies have stepped down amid controversy. Former SEC Chairman Harvey Pitt did so in 2002. But even that is rare.

There's no precedent for it at the FHFA, which was created in 2008 just before the government bailed out Fannie and Freddie. DeMarco said this week that he has experienced "a substantial attempt to influence or direct an independent regulator."

By law, the president nominates the FHFA director for a five-year term, and can remove him only "with cause." But unlike those of some independent agencies, the statutes governing the FHFA don't define "cause." The agency declined our request for comment, while the White House didn't respond.

Even if the president got DeMarco to step down, the administration would only wind up with one of DeMarco's deputies as another acting director, which wouldn't guarantee a shift in policy.

The Obama administration may believe that it can't get a new nominee through Congress. After all, the previous nominee, Joseph Smith, was opposed by some Republican senators precisely because they felt he would be too close to the administration on principal reductions. In the meantime, DeMarco is taking the heat on principal reductions while other shortcomings in Obama's housing policy fall out of focus.

Despite some of the heated rhetoric and criticism, DeMarco doesn't face easy choices. His mandate to protect Fannie and Freddie's bottom line — and thus taxpayer money — can conflict with his agency's duty to promote the stability of the broader housing market.

While DeMarco has opposed principal reductions on the basis that they would be too costly, ProPublica and NPR recently reported that FHFA internal estimates revised their earlier position, and that in light of new government incentives, principal reductions may now actually save the companies money. This week, DeMarco told The Financial Times that principal write-downs would amount to a giveaway to banks — seemingly a new argument for him.